The Portability part of Florida’s Homestead Laws let you move your accrued Homestead savings, up to a maximum of $500,000 to any subsequent home in Florida! However, the time between when you relinquish your current Homestead and establish a new one in Florida must basically be within 2 years (more detail below).
Let’s say that you buy a new home for $250,000 and you live there for the next 20 years. We all know that life is dynamic, and maybe your kids have left for college or you want to retire. Maybe you want to look at buying a different house that is more suitable to your new lifestyle. Now that 20 years have gone by that $250,000 house is worth $650,000! However, thanks to the “Cap” that we discussed above, your Assessed Value has only gone up to $275,000. So even though your house has a Market Value of $650,000 you’re only paying property tax on $275,000. Now you are thinking about moving to a new home that you want to buy for $700,000, but you realize that on the new house you are going to be paying property tax on about $700,000! Under typical tax rates in Florida, that means you’re probably only paying about $4,500 in tax on your current home, but if you move to the new $700,000 home you’re going to be paying almost $14,000 a year, and that might just keep you from deciding to move!
In 2007 (Effective Jan. 1, 2008) the Florida legislature passed a law that says that people who are selling their Florida Homestead and who establish another Homestead in Florida within a certain period (roughly 2 years), can transfer up to $500,000 of their Homestead Savings to their new home. This is called “Portability”. So if you decide to buy that new $700,000 home and you remember to file for Portability (which unfortunately many people forget), your Homestead Savings of $375,000 (Your Market Value of $650,000 – Your Assessed Value of $275,000) is transferred over to your new home applied as a deduction against the new home’s Market Value. This will save you about $7,500 EVERY YEAR that you own your new home! Obviously, forgetting to file for Portability is one of the most serious mistakes you can make with managing your Homestead Savings, and unfortunately it’s one of the most common! Portability also works if for some reason you don’t sell your current home, but rather relinquish its Homestead status.
Remember, your Homestead filing is considered to be effective on January 1st of the year, so long as ON OR BEFORE that January 1st you resided in the home with the intent to permanently remain there, and did not have a Homestead elsewhere. So, as an example, if you moved into your new home on Dec. 28th, 2018, then so long as you file for Homestead by March 1st, 2019, then your Homestead filing will be effective on January 1st of 2019. So long as you had a prior Homestead in effect in Florida in 2018 or 2017, you are eligible for Portability transfer of your Homestead Savings™.